Equity Grant Timing
It would be prudent for companies to look closer at their equity grant practices and policies and, where they have not done so already, adopt policies providing for grants during “open windows.”
The significant drop in stock prices this year has many companies rethinking their equity grant practices to manage “burn rates” and preserve share authorizations.
We have observed several different approaches among our clients to achieve these objectives.
Companies need to take care in communicating these changes to ensure transparency and maintain trust. Communications should cover factors such as the rationale for making changes, whether these changes are temporary, and the benefits to employees where they exist (e.g., greater leverage, more certainty).
As context for decision-making, boards can consider the following before adopting a course of action:
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